Short sellers of Tesla shares lose billions after Donald Trump's election victory

As Tesla shares continue their rally on the heels of Donald Trump's election victoryShort sellers are feeling the pain.

Hedge funds are betting against Tesla (TSLA+7.81%) Stock, also called short selling, lost at least $5.2 billionBloomberg calculated using data compiled by S3 Partners. This comes as a manufacturer of electric vehicles, at the helm of the billionaire and staunch Trump ally Elon Musk sees another rise, which once again benefited his market capitalization Exceed $1 trillion last week.

Since Election Day, Tesla shares have risen nearly 28%, with shares up nearly 7% in premarket trading on Monday. As of last Friday, shares of the EV company were up 44% compared to the previous 12 trading days That beat the Nasdaq's 4 percent gain during the same period, said Gene Munster, managing partner at Deepwater Asset Management.

Musk has become a close ally of Trump even in the last few months spend election night with him at Trump Mar-a-Lago Resort in Florida. Earlier this year, Musk launched a super PAC to support Trump's re-election bid donated at least $80 million.

This could give Tesla a significant advantage under the new Trump administration — including some influence over self-driving vehicle regulation — while putting its competitors at a disadvantage.

The CEO, who runs a number of other companies including SpaceX, is poised to have some level of experience Role or influence in the incoming Trump administrationincluding perhaps leading a newly proposed Department of Government Efficiency (or DOGE, after Musk's favorite cryptocurrency).

As part of this task, Musk announced that he would do this advocate for a national approach to regulating self-driving vehicles – a key market for Tesla – and lowered regulations, something he has done repeatedly criticized as if he was holding back his companies. SpaceX, Neuralink, X and Tesla are collectively the subject of at least 20 current investigations or reviews.

While Trump's victory is good for Tesla, it is also expected less friendly to other automakers with EV plans. He is expected to freeze President Joe Biden's regulations Inflation Reduction Act of 2022, which provided $7,500 in tax credits for electric vehicles manufactured in the United States. Musk has supported eliminating the tax credit because he believes it would benefit Tesla's sales while hurting its competitors.